DEPARTMENTS PREP FOR SPENDING CUTS

Two weeks ago, Governor Granholm said department heads had been put on alert for spending reductions in response to the credit meltdown and the subsequent economic contraction, but now the potential loss of one of the Big Three has put new emphasis on the process. Facing uncharted fiscal territory with the likely merger of Chrysler—and the before now unthinkable demise of General Motors—state officials are now grappling with the distinct possibility there will be serious budget cuts imposed on both the 2008-09 and 2009-10 Fiscal Year budgets. An Executive Order, which is required in order to reduce 2008-09 spending, is expected to be presented by the Governor before the Legislature adjourns in December.